Brazil: Industrial production rebounds in October
December 2, 2010
In October, industrial production rose 0.4% over the previous month in seasonally adjusted terms. The expansion followed on two broadly flat readings but was softer than the 0.6% rise expected by the market. Industrial output appears to have left the slowdown behind with a solid monthly expansion in the first month of the fourth quarter, suggesting that the third quarter moderation was temporary. On an annual basis, growth in industrial output weakened and registered a paltry 2.1% rise in October (September: +6.3% year-on-year). The monthly expansion reflects an improvement in the production of durable goods (+2.8% month-on-month), such as vehicles (+1.6% mom). On the other hand, capital goods output continued to moderate (-0.2% mom). The moderation points to a deceleration in investment growth during the fourth quarter. Despite the dismal October reading, the trend continues to point upwards, with the annual average growth rate inching up from 11.2% in September to 11.8% in October, which is broadly in line with the Consensus Forecast of an 11.6% increase for 2010. In 2011, the panel expects industrial output growth to moderate to 5.2%.